Petroleum Business Review
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*Impact of the Closure of the Strait of Hormuz on the Crude Oil and Petroleum Products Market

Document Type : Original Article

Authors

Seyyed Abdullah Razavi 1
leila Kashani 2
Maralkhani Azar Fatemeh 3

1 Associate Professor, Department of Petroleum Economics and Energy Diplomacy, Petroleum University of Technology, Tehran, Iran

2 Master of Economic Sciences, Islamic Economics, Department of Economics and Islamic Banking, Faculty of Economics, Kharazmi University, Tehran, Iran

3 Master of Oil and Gas Economic, Tehran Faculty of Petroleum, Petroleum University of Technology, Tehran, Iran

https://doi.org/10.22050/pbr.2026.579272.1432
Abstract
The Strait of Hormuz, as one of the world’s most strategic energy chokepoints, plays a vital role in the maritime trade of crude oil and natural gas, and many Asian economies are heavily dependent on it. Following the onset of the 2026 tensions and conflicts, vessel traffic in the strait has sharply declined, with more than 95% of shipping flows disrupted. Daily vessel crossings have dropped from several per day to nearly zero, with only a few limited transits permitted under special authorization. The absence of effective alternative routes—especially for countries reliant on energy exports through this passage—has placed significant pressure on global markets and heightened concerns about the stability of supply. Under such circumstances, Asian markets, the primary destination for oil and gas passing through Hormuz, face the greatest vulnerability. If this situation persists, rising transportation costs and escalating geopolitical risks could seriously challenge the stability of the global energy market. The geopolitical importance of the strait means that any disruption extends far beyond the region, producing immediate consequences for energy and financial markets as well as national economies. For energy exporters, this results in reduced foreign‑exchange revenues, while energy importers face higher costs, inflationary pressures, and slower economic growth. Utilizing an analytical–descriptive approach and a multilayer scenario‑building framework

Highlights

·        Closure or severe restriction of the Strait of Hormuz would generate a systemic shock to global energy security, extending beyond oil transportation to affect export capacity, imports, global energy prices, economic growth as measured by gross domestic product (GDP), refining operations, and broader oil industry activities.

·        The economies of Persian Gulf countries are particularly exposed to potential disruptions in the Strait of Hormuz, as substantial volumes of crude oil, liquefied natural gas (LNG), and petroleum products destined for major importers such as China, India, Japan, and South Korea transit through this critical chokepoint.

·        Disruptions in the Strait would initially be reflected in geopolitical risk premiums in futures markets, which could subsequently transmit to physical supply chains through higher insurance costs, shipping delays, tanker rerouting, and increased pressure on refinery operations, ultimately contributing to higher spot prices and inflationary risks.

·        The implications extend beyond oil markets to other commodity supply chains, including fertilizers, aluminum, and sulfur, highlighting broader risks to food security and industrial inputs and underscoring the need for alternative pipeline capacity, strategic reserves, and coordinated crisis-management mechanisms.

Keywords

Oil Market
Petroleum Products
Oil Exports
Oil Tanker
Strait of Hormuz
Subjects
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  • Receive Date 21 April 2026
  • Revise Date 13 June 2026
  • Accept Date 13 June 2026

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